CBRT Governor Perplexed By TRY Weakness, Denies Erdogan Pressure

LOCAL NEWS

• CBRT Gov Kavcioglu says he sees no reason for further lira decline as current account deficit falls and lira deposits rise - saying his opinion on interest rates is known, when asked about criticism that rate cut was made on Erdogan's demand.
  • Interest rates are important but real sector's issues need to be addressed. Economy should be seen as a whole and real sector suffer from high interest rates.
  • Kavcioglu cites contractors' complaints on high interest rates and reminds that other sectors have similar discomfort. Notes Central bank's policy won't be able to reduce inflation on its own, especially the food inflation. Fight against inflation will continue but to reduce food inflation all parties need to take responsibility.
  • Kavcioglu plans to bolster central bank's FX reserves via rediscount loans and purchasing gold from local miners. Also says he is unable to understand rise in Turkey's CDS premiums compared to some emerging economies
• Parliament returns from 2.5 month recess on Oct 1 to a busy schedule, including ratification of the Paris Climate Accords, Submission of the Central Govt budget for 2022 (17 Oct), discussion of lowering the election threshold to 7%
• CHP leader Kikicdaroglu says the number of political parties that will join the Nation Alliance could increase before the 2023 elections. Says that the alliance's goal oriented focus on producing solutions to problems will produce good results.
  • In 2018 the Nation Aliiance received 33% of the votes while the People's alliance received 53.66%
• Turkey reports 27,177 new Covid-19 cases, 206 deaths